Thermo Fisher Scientific Inc. (NYSE: TMO), the world leader in serving science, announced today that it has signed definitive agreements to sell its Athena Diagnostics and Lancaster Laboratories businesses for a total of $940 million in cash.
The company reached an agreement to sell Athena Diagnostics to Quest Diagnostics Incorporated for $740 million. Athena Diagnostics, based in Worcester, Mass., is a leading reference laboratory that provides comprehensive diagnostic testing for neurological and other diseases, with an emphasis on gene-based tests. The business had approximately $110 million in revenues for full year 2010, has approximately 300 employees and is part of the company's specialty diagnostics business within its Analytical Technologies Segment. Quest Diagnostics, based in Madison, N.J., is the world's leading provider of diagnostic testing, information and services. The company offers the broadest access to diagnostic testing services through its network of laboratories and patient service centers, and provides interpretive consultation through its extensive medical and scientific staff. Quest Diagnostics reported 2010 revenues of $7.4 billion.
The company also reached an agreement to sell Lancaster Laboratories to Eurofins Scientific SE for $200 million, subject to a post-closing adjustment. Lancaster Laboratories, based in Lancaster, Pa., is a contract-testing laboratory that provides comprehensive analytical services for pharmaceutical, biopharmaceutical and environmental sciences customers. The business had approximately $115 million in revenues for full year 2010, has approximately 1,100 employees at its operations in the U.S. and Ireland, and is part of the company's biopharma services business within its Laboratory Products and Services Segment. Eurofins Scientific, based in Brussels, Belgium, is a leader in providing laboratory services for the pharmaceutical, bioanalytical, environmental and food processing industries. Eurofins reported revenues of approximately $900 million in 2010 and has 8,000 employees located in 30 countries throughout Europe, the U.S., Asia and South America.
"Athena and Lancaster have performed very well within our company and we believe that these strategic buyers will offer them even greater opportunities for growth in the long term," said Marc N. Casper, president and chief executive officer of Thermo Fisher Scientific. "The transactions position both businesses in companies that are closely aligned with the unique contract laboratory services they provide and, at the same, will generate significant proceeds that we can redeploy to create shareholder value."
Thermo Fisher expects to close these transactions in the second quarter of 2011, subject to customary closing conditions and applicable regulatory approvals. Financial results for both businesses, including historical comparative periods, will be reported in discontinued operations beginning in the first quarter of 2011.
Thermo Fisher's board of directors has also authorized a new $750 million share repurchase program, which expires February 22, 2012. As of today, the company has approximately $385 million remaining under its existing share repurchase authorization, which expires September 8, 2011.
In 2010, Athena and Lancaster, combined, contributed $0.11 to Thermo Fisher's full year adjusted earnings per share (EPS), or $0.09 on a GAAP basis. The company's 2011 full year guidance, provided on February 2, 2011, did not include the impact of these divestitures or the benefit of its pending acquisition of Dionex Corporation.
Assuming Dionex closes early in the second quarter, the net effect of the two divestitures, the addition of Dionex and the benefit of the new share repurchase program would lead to an increase of approximately $0.05 to 2011 adjusted EPS. Thermo Fisher will update its 2011 financial guidance early in the second quarter.
Thermo Fisher Scientific Inc.